Marco Castillo

Discrimination in the lab: Does information trump appearance?

Using a laboratory experiment, we find evidence consistent with statistical discrimination in a public good and group formation game. In the game, payoff relevant information is presented to subjects, thereby making it costly to discriminate when choosing group members. We find that behavior is correlated with race and people use race to predict behavior. However, race only matters when information on behavior is absent. These results are further confirmed when incentives are in place to encourage behavior that is counter to stereotypes. Not all subjects discriminate in the same way, suggesting unfamiliarity and some in-group, out-group bias. Overall, the evidence points to a lack of information rather than discriminatory preferences.

Trustworthiness and Social Capital in South Africa: Analysis of Actual Living Standards Data and Artifactual Field Experiments

This article measures trustworthiness using an experimental protocol designed to distinguish this social norm from purely altruistic preferences. Experimental participants were drawn from South African households surveyed by a longitudinal living standards study. This procedure not only permits analysis of the impact of experimentally measured social norms on real-world outcomes but also provides a rich array of data that can be used to control for initial conditions and prior possibilities that might be spuriously correlated with norms. Interestingly, altruism has more robust effects on living standards than does trustworthiness, though both are statistically signficant. This finding motivates a deeper reconsideration on how trusts works, especially in societies like South Africa’s, where the boundaries of trust are by a history of social exclusion and segregation.

ON THE PREFERENCES OF PRINCIPALS AND AGENTS

One of the reasons why market economies are able to thrive is that they exploit the willingness of entrepreneurs to take risks that laborers might prefer to avoid. Markets work because they remunerate good judgement and punish mistakes. Indeed, modern contract theory is based on the assumption that principals are less risk averse than agents. We investigate if the risk preferences of entrepreneurs are different from those of laborers by implementing experiments with a random sample of the population in a fast-growing, small-manufacturing, economic cluster. As assumed by theory, we find that entrepreneurs are more likely to take risks than hired managers. These results are robust to the inclusion of a series of controls. This lends support to the idea that risk preferences are an important determinant of selection into occupations. Finally, our lotteries are good predictors of financial decisions, thus giving support to the external validity of our risk measures and experimental methods.

What Persuades Voters? A Field Experiment on Political Campaigning

Political campaigns spend millions of dollars each voting cycle on persuading voters, and it is well established that these campaigns do affect voting decisions. What is less understood is what element of campaigningNthe content of the message or the delivery method itselfN sways voters, a question that relates back to how advertising works generally. We use a field experiment in a 2010 general election for local office to identify the persuasive mechanism behind a particular form of campaigning: candidate door-to-door canvassing. In the experiment, the candidate either canvassed a household or left literature without meeting the voters. In addition, the literature either contained information on the candidate or on how to vote. Our main result is that voters are most persuaded by personal contact (the delivery method), rather than the content of the message. Given our setting, we conclude that personal contact seems to work, not through social pressure, but by providing a costly or verifiable signal of quality. Length: 49

The Today and Tomorrow of Kids

We experimentally investigate the distribution of childrens time preferences along gender and racial lines. We find that boys are more impatient than girls and black children are no more impatient than white children. However, this pattern hides the fact that black boys have the highest discount rates of all groups. Most importantly, we show that impatience has a direct effect on behavior. An increase of one standard deviation in the discount rate increases the probability that a child has at least 3 disciplinary referrals by 5 percent. Time preferences might play a large role in setting appropriate incentives for children.

Discrimination in the Warplace: Evidence from a Civil War in Peru

Few events give the opportunity to observe the full range of human behavior as wars do. In the case of civil wars in ethnically-mixed societies, the distribution of violence across various segments of the population can provide evidence on the extent and nature of discrimination. As in the case of markets, identifying discrimination in the warplace is challenging. There is uncertainty on the reconstruction of events as well as the rationale behind the violence. We use a unique data set collected by the Peruvian Truth and Reconciliation Commission on war crimes during the 1980A¢??s to show that there is evidence of taste-based discrimination by agents of the state towards ethnic minorities and women. The evidence is robust to different assumptions on the logic of repression and missing data problems.

Negative campaigning, fundraising, and voter turnout: A field experiment

Why do candidates risk alienating voters by engaging in negative campaigning? One answer may lie in the large empirical literature indicating that negative messages are more effective than positive messages in getting individuals to do many things, including voting and purchasing goods. Few contributions to this literature, however, gather data from a field environment with messages whose tone has been validated. We conduct field experiments in two elections for local office which test the effect of confirmed negative and positive letters sent to candidates’ partisans on two measurable activities: donating to the candidate and turning out to vote. We find that message tone increases partisan support in ways that may help explain the persistence of negative campaigning. Negative messages are no better than positive messages at earning the candidates donations, but negative messages yield significantly higher rates of voter turnout among the candidates’ partisans relative to positive messages. Positive messages, however, are not neutral relative to no message.

Beautiful or White? Discrimination in Group Formation

We explore the importance of appearance in the endogenous formation of groups using a series of experiments. Participants get to choose who they want in their group, and we manipulate the amount of payoff-relevant information on behavior, thereby making it costly to discriminate based on appearance. We draw participants from a representative sample of a demographically and economically diverse population. This allows broader applicability of our results. We find that beauty predicts desirability as a group member, yet it might mask racial preferences. Payoff-relevant information reduces discrimination a great deal, yet discrimination based on appearance remains. Although their behavior is the same, unattractive participants have a one in ten chance of making it to the most preferred group, whereas attractive participants have a one in three chance. Our results are most consistent with taste-based, rather than statistical, discrimination.

Truncation strategies in two-sided matching markets: Theory and experiment

We investigate strategic behavior in a centralized matching clearinghouse based on the Gale–Shapley deferred acceptance algorithm. To do so, we conduct a laboratory experiment to test the degree to which agents strategically misrepresent their preferences by submitting a “truncation” of their true preferences. Our experimental design uses a restricted environment in which a particular form of truncation is always a best response. We find that subjects do not truncate their preferences more often when truncation is profitable. They do, however, truncate their preferences less often when truncation is dangerous – that is, when there is a risk of “over-truncating” and remaining unmatched. Our findings suggest that behavioral insights can play an important role in the field of market design.

LOST IN THE MAIL: A FIELD EXPERIMENT ON CRIME

Crime in the mail sector can hamper the development of electronic markets. We use a field experiment to detect crime and measure its differential impacts. We subtly, and realistically, manipulate the content and information available in mail sent to households and detect high levels of shirking and stealing. Eighteen percent of the mail never arrived at its destination, and even more was lost if there was even a slight hint of something additional inside the envelope. Our study demonstrates that privatization has been unable to extricate moral hazard and that crime is strategic and not equally distributed across the population.